NRI Deposits Rate Hike: Bring dollars, get bumper profits! Indian banks made historic changes in FCNR scheme, know the new rule of earning

The effect of the incentives given by the Reserve Bank of India (RBI) to increase the foreign exchange reserves in the country and strengthen the rupee at the international level is now clearly visible. The country’s largest public sector banks—State Bank of India (SBI) and Bank of Baroda (BoB) have drastically increased the interest rates on Foreign Currency Non-Resident (FCNR(B)) Deposit Scheme to woo their NRI customers. After this historic change, Indians living abroad will be able to get higher and more attractive returns on their dollar deposits than before. Under the new rules, NRI customers can now earn up to 6 per cent annual return on direct deposits in US dollars (USD), which earlier used to be only around 3.35 per cent. That means banks have directly taken a big jump of up to 2.65 percent. Let us tell you that before this, HDFC Bank, Yes Bank and AU Small Finance Bank have also updated their interest rates. Mathematics of SBI’s new ‘FCNR Advantage Scheme’ State Bank of India has specially introduced ‘FCNR(B) Advantage Deposit Scheme’ to take advantage of this opportunity. The interest rates under this scheme have been decided very smartly according to the amount of deposit and tenure: For deposits up to 1 million dollars (1 Million USD): 3 years to less than 4 years: 5.25 percent interest. For tenure from 4 years to less than 5 years: 5.50 percent interest. For full 5 years fixed tenure: 5.75 percent interest. On large deposits of more than $10 lakh: If an NRI customer deposits more than $10 lakh for full 5 years, he will be given a bumper return at a maximum rate of 6 percent. Bank of Baroda (BoB): New rates on different foreign currencies Bank of Baroda has increased its interest rates not only on the US dollar but also on many other major currencies of the world. According to the bank’s executive director Beena Waheed, due to the recent relaxation given by RBI in the rules of FCNR (B) deposits and foreign commercial loans (ECB), it has become much easier for banks to raise foreign funds. You can easily understand the new rates of Bank of Baroda from the table given below: Rules for premature withdrawal: Understand the lock-in period Even though the interest rates are very attractive, but before investing in this new FCNR(B) Advantage Scheme of SBI, you must know its strict rules of ‘pre-mature withdrawal’. The bank has set a series of penalties depending on the time limit for withdrawal of money: 1.Within first 1 year (0 to 12 months): Complete ban. You cannot withdraw your money prematurely under any circumstances during the first one year after making the deposit. Complete lock-in will be implemented in this. After 2.1 years but before 3 years: Fixed rate of 3.50%. If you withdraw money after the completion of one year and before the end of the three-year period, you will not get the fixed rate of the scheme. You will be given interest only at the rate of 3.50 percent for the period the money remains in the bank. After 3.3 years but before 5 years: Deduction of 1% (Penalty). If you withdraw your deposit after completion of three years but before maturity (5 years), the bank will deduct 1 per cent of the interest rate that was applicable for that specific period and will hand over the remaining amount to you. Expert Takeaway: If you are an NRI and want to earn strong returns while keeping your hard-earned money safe amid global market fluctuations, then now is the best time to open an FCNR(B) account with Indian banks. Just assess your liquidity (need for money) before investing, so that you do not have to pay premature withdrawal penalty.